In July 2021, the Chinese State Council* issued a policy note known as the ‘720 policy’ (initially issued on the 20th of July) further regulating its private tutoring industry including that online. This blog starts with a reading of the policy especially of its impact on the online ESL sector. It is followed by a scenario analysis – what might happen to online ESL teachers in various scenarios. The final section emphasises what online ESL teachers can do. Last but not the least, it is important to understand that this policy might disrupt the supply of education but not necessarily lower the demand for good education.

(*The Chinese State Council serves an administrative role. It issues policies not laws. How these policies are interpreted and implemented may well vary from region to region.)

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Context

Facing an aging population, the Chinese government is trying to increase the birth rate by state intervention. By upping the role of the state in providing affordable housing, education, and healthcare, the Central Government hopes to see a rise in the birth rate in response. In the area of education, the state requires the public sector to play a larger role and restricts the role of private enterprise in education. (See below ‘720’ policy)

‘720 Policy’

The stated objectives of the policy are to construct a virtuous ecosystem in education, reduce parents’ anxiety and facilitate students’ holistic and healthy growth. The document is 16 pages long so I am listing below the items that potentially have a direct impact on the online ESL sector:

Cut ties between private capital and the tutoring sector

Training institutions for core subjects are to register as non-profit organisations. These institutions are prohibited from initial public offering public on capital markets.

Impact on online ESL sector: It cuts the ties between private money and the tutoring sector. As a result, investors will leave the K-12 education sector.

Propose a more scientific use of after-class time

Schools and parents should guide children to participate in household duties, appropriate sports, reading, and art-related activities. Parents should actively communicate with children, care for their mental health, and help them foster a good learning habit (though the policy does not specify what this is). Online classes should last less than 30 minutes and finish no later than 9 pm.

Impact on online ESL sector: It means more restrictions on when and how long online teaching can take place.

Enlarge the role of public resources

Schools are expected to provide after-class custodian services to fit working parents’ office schedules. Schools can contract volunteers or people outside the public school system to provide such services. The Ministry of Education will develop free and good-quality online learning materials to improve education for all.

Impact on online ESL sector: This has more impact on in-person tutoring classes as some parents use these classes as a child-minding service.

Regulate outside-school training activities

Outside-school training institutions should not rely on education materials from outside China. Academic subject training should not take up students’ holiday and weekend time. They should no hire non-Chinese nationals from outside China.

Impact on online ESL sector: This is the item that concerns online ESL teachers the most. I have a separate section – scenario planning – to discuss various scenarios as to how this article can be interpreted and implemented.

Regulate training activities for pre-school children

Online training for pre-school children will be prohibited and that includes English subject training.

Impact on online ESL sector: Unfortunately this means a contraction of online English education for Chinese children below the age of six or seven.

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Implementation

Nine cities have been selected to pilot three measures – to clamp down on private tutoring of core academic subjects; to extend school offerings for after-school activities, and to regulate private tutoring companies’ fee-charging. These nine cities are Beijing, Shanghai, Shenyang, Guangzhou, Chengdu, Zhengzhou, Changzhi, Weihai, and Nantong.

The ‘720 policy’ regulates training institutions registered in mainland China. If you are an ESL teacher working with a platform such as VIPKid, Magic Ears, Qkid, GogoKid, DadaABC, Whales English, 51talk etc, the future largely depends on what is the legal identity of the platform and how it navigates the situation.

Based on my research in the Chinese company registration database (Tianyancha.com), companies such as VIPKid, Qkid are registered as technology and IT service companies, not training companies. That gives room for interpretation.

Also, some online ESL teachers are paid from an overseas legal entity. Again, this leaves room for interpretation. Are these overseas legal entities subject to the ‘720 policy’?

After reading some expert analysis, I have formed the impression that the priorities are designed to cut the ties between private enterprise and tutoring, to clamp down academic subject tutoring and to restrict repetitive cramming.

I don’t form the impression that a freeze on hiring non-Chinese ESL teachers outside China is a priority of this current policy. I also have not read or heard that any Chinese online ESL platforms have received notification from the government to do so. It is also unclear in the policy what these platforms should do with existing teachers.

These are scenarios we can prepare for

• Best scenario: Chinese-based online ESL platforms such as VIPKid are not impacted. Online ESL teachers to Chinese students can carry on as usual. The chance is relatively low.
• Worst scenario: Chinese-based online ESL companies are told to end their contracts with every teacher based outside China. All online ESL teachers lose their teaching time with Chinese students. The chance is also quite slim.
• Somewhere in between: the most likely scenario will be a gradual contraction of the current online platform business model. This might lead to less hiring of teaching professionals outside China, and a renegotiation of the payment structure from the platform to teaching professionals. Subsequently, some ESL teachers will leave the sector to pursue other opportunities or markets.

It will take some time for the industry to adjust and reshuffle. Meanwhile, what should online ESL teachers do to prepare for an uncertain future?

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Continue to excel at what you do:

Carry on teaching as usual and make sure every time you conduct a class, you do better than the last time. The habit of pursuing excellence will follow you everywhere no matter what you do.

Take a pause to reflect:

This might sound clichéd but a reflection on why you got into teaching initially and what you get out of it (on top of financial returns) is needed. You are more likely to overcome hurdles and turbulent times if you are pursuing a career path you are passionate about in the long term.

Plan your portfolio:

If you decide to stay in the education sector, it is time to plan a long-term portfolio so that you can manage your risk, build on your strengths and make your work fit your lifestyle. The last thing one can do at the moment is to apply for other jobs without a proper plan. If you have the right qualification and experience, you can further design your teaching portfolio based on the following directions:

• • Other countries: you could apply for jobs in other countries. But do bear in mind that many others will have the same reaction which can drive down the pay rate temporarily.
  • Other subjects: if you used to teach English as a second language, can you offer to teach certain content using English as a language? For example, teaching 1-1 biology tutoring in English for students who are preparing for overseas studies?
  • Other education: If the state education policy is to facilitate students’ holistic and healthy growth, is there anything you can do in the areas of critical thinking, creativity, character development, arts, and sports education?
  • Other customers – are there any opportunities around you to use your previous experience? Is there a need from parents of the students you teach? Is there a need from students in your physical environment you can reach out to?
  • Other partners: can you work with some language teaching institutions in the areas of curriculum design, in-person class or teacher training?

I suggest you spend some time thinking through these options and exploring the most suitable path for you. It is important to stay put and plan a long-term strategy instead of sending resumes around in a rush.

Path to independent teaching

This is the most rewarding but also challenging path. We need to bear in mind that the ‘720 policy’ regulates the supply side of education. But if the demand for good education for their children remains high from Chinese parents, who is there to meet the demand? There may be opportunities for freelancing teachers to fill the gap.

In order to do that, a teacher needs to change the mindset to be an entrepreneur, to understand customers and to set up infrastructure for marketing and payment. It is a big step to move from a teacher delivering classes for a platform to a teacher-entrepreneur who has to understand customer needs, design products and deliver education. Most times, one needs to work with various partners to get started. But each tiny step counts for a future giant leap into independence.

Join our digital course ‘From Good to Great, Level Up Your Teaching Business’ to empower you to develop a sustainable and successful independent teaching career. Read our course page to find out more.

Having obstacles launching your independent teaching path? Book my 1-1 business coaching via the link.

Teachers, Be Fearless!